The State Bank of Vietnam (SBV) has required commercial banks to increase their lending to mitigate losses in agricultural production, as implementation of the policy has remained restricted.

After six months of implementation, lending has remained modest. Last April, the SBV issued Circular No 13/2014/TT-NHNN to guide commercial banks in granting loans to enterprises, co-operatives, co-operative teams, households and individuals to help them mitigate losses in agricultural production.

Under the regulation, borrowers will get Vietnamese dong loans to buy machinery and equipment in the list of machinery and equipment manufactured domestically or imported under the guidance of the Ministry of Agriculture and Rural Development. The loans could be up to 100 percent of the machines' total prices.

Commercial banks will provide loans with the lowest rate applicable in the service of the agricultural and rural sector, with the same tenure and period. Interest payment on loans is waived in the first two years and half of the interest payment is waived on the third year.

Preferential loans will also be offered to develop production and storage facilities projects. The loans could be up to 70 percent of project value and may last for a maximum of 12 years.

According to the SBV, Vietnam's credit for agriculture in the first 10 months of 2014 increased by 8.2 percent.-VNA